UK market drives Rightmove's growth

3rd Aug 2011 07:10

The general increase in home hunting activity and the rapid increase in the use of mobile devices is proving a boon for property listings web site Rightmove.Revenue in the first half of 2011 was up 20% to £47.0m from £39.2m the year before.Underlying operating profit over the same period was up 25% to £33.4m from £26.8m, while pre-tax profit rose to £28.75m from £24.53m. Broker Brewin Dolphin has predicted profit before tax of £29.5m.Underlying earnings per share rose 35% to 24.8p from 18.4p last year. Diluted earnings per share on continuing operations rose 24% to 19.7p (2010: 15.9p). Brewin Dolphin has forecast earnings per share of 20.2p.Cash conversion exceeded 100%, with cash generated from operations rising from £27.5m last year to £32.3m. At the end of June, the cash balance stood at £18.9m, down from £22.9m a year earlier, reflecting the £23.4m the company spent buying back 2.3m during the half-year period.Page impressions on Rightmove web sites rose 23% to 4.8bn from 3.9bn in the first half of last year, with the group's market share rising by one percentage point to 83% of all page impressions on the top four UK property web sites.The number of advertisers is up 2% so far this year at 18,480 from 18.042 at the end of 2010, and is up 3% on the end-June 2010 figure of 17,993. Average revenue per advertiser is up 18% at £430 per month from £365m at the half-year stage last year.The retention rate among agents is in line with the historical average and the churn rate among new home advertisers is lower than the historical average. The overseas picture was not so bright, however, as a result oftightening consumer spend and lack of debt financing. "Advertiser numbers are essentially unchanged since the start of the year at 547 (+1)," the company said. Average spend per advertiser has fallen from £241 per month a year ago to £207 per month, reflecting the change in mix from the continued growth in private advertisers advertising a single property. Overall, overseas revenue is up 4% on a year ago, reflecting some additional revenue from business partnerships and advertisingof non-property services relevant to overseas homes buyers and sellers.As for current trading for the group as a whole, the company said: "Rightmove's trading in July has been in line with that during the first half of the year and our subscription revenue model gives us confidence in achieving our expected out-turn for the year. We do not believe that flat or modest falls in house prices would materially affect the outlook, provided that transaction volumes do not take a sharp downward turn, and expect to make further progress in 2012."The interim dividend has been increased by 40% to 7p per ordinary share, from 5p last year, reflecting Rightmove's intention to "continue to return post-tax operating profits to shareholders promptly." --jh